MARKHAM, ONTARIO — (Marketwired) — 09/10/13 — Enghouse Systems Limited (TSX: ESL) today announced its unaudited third quarter financial results for the period ended July 31, 2013.
Third quarter revenue was $46.3 million, an increase of 31% over revenue of $35.4 million in the third quarter last year, with incremental revenue coming primarily from acquisitions. Revenue includes recurring hosted and maintenance services contributions of $23.5 million in the quarter, an increase of 21% over last year-s revenue of $19.5 million. Adjusted EBITDA for the quarter was $12.2 million or $0.46 per diluted share compared to $9.2 million or $0.35 per diluted share in last year-s third quarter. Results from operating activities for the quarter were $11.7 million compared to $8.3 million in the prior year-s third quarter and include special charges booked on acquisitions of $0.1 million in the quarter. Net income for the third quarter was $6.3 million or $0.24 per diluted share compared to the prior year-s third quarter net income of $4.3 million or $0.16 per share. On a year to date basis, revenue was $132.7 million compared to $97.4 million, an increase of 36%. Adjusted EBITDA for the year to date was $32.5 million or $1.23 per diluted share compared to $24.9 million or $0.96 per share.
Operating expenses increased to $21.2 million from $17.5 million in the prior year-s third quarter and include incremental operating costs related to acquisitions as well as special charges related to restructuring of acquired operations. Non-cash amortization charges in the quarter were $4.0 million compared to $2.9 million in the prior year-s third quarter and includes amortization charges for acquired software and customer relationships including operations acquired in the current year.
Enghouse closed the quarter with $92.0 million in cash, cash equivalents and short-term investments, compared to $80.9 million at April 30, 2013 and $83.7 million at October 31, 2012. This reflects cash paid in the quarter of approximately $3.0 million related to holdbacks for the acquisitions of Zeacom and Locus. It also reflects a cash dividend of $2.1 million paid in June 2013. The Company continues to have no long-term debt.
During the quarter, the corporate management team was strengthened with the additions of Craig Wallace as Chief Operations Officer and Geoff Bartle as Corporate Vice President, Information Systems. The additional corporate management was needed to take the Company to the next level of its development.
On September 6, 2013, the Company acquired Safeharbor Knowledge Systems, LLC. Based in Satsop (Seattle), Washington, Safeharbor delivers a SaaS based, unified knowledge base and community forum platform with proven scalability, augmenting the Company-s Interactive Management solutions portfolio.
The Board of Directors has approved an eligible quarterly dividend of $0.08 per common share, payable on November 29, 2013 to shareholders of record at the close of business on November 15, 2013.
Enghouse continues to seek further acquisitions to grow its market share.
A conference call to discuss the results will be held on Wednesday, September 11, 2013 at 8:45 a.m. EST. To participate, please call 416-849-8296 (PIN 89681544#) in Toronto or North American Toll-Free 1-866-551-3680 (PIN 89681544#).
About Enghouse
Enghouse Systems Limited is a leading global provider of enterprise software solutions serving a variety of distinct vertical markets. Its strategy is to build a larger and more diverse software company through strategic acquisitions and managed growth. Enghouse shares are listed on the Toronto Stock Exchange under the symbol “ESL”. Further information about Enghouse may be obtained from the Company-s web site at .
Non-IFRS Measures
The Company uses non-IFRS measures to assess its operating performance. Securities regulations require that companies caution readers that earnings and other measures adjusted to a basis other than IFRS do not have standardized meanings and are unlikely to be comparable to similar measures used by other companies. Accordingly, they should not be considered in isolation. The Company uses results from operating activities and Adjusted EBITDA as a measure of operating performance. Therefore, results from operating activities and Adjusted EBITDA may not be comparable to similar measures presented by other issuers. Results from operating activities are calculated as net income before amortization of acquired software and customer relationships, finance income, finance expenses, other income, and the provision for income taxes. Results from Adjusted EBITDA are calculated as net income before depreciation of property, plant and equipment, amortization of acquired software and customer relationships, finance income, finance expenses, other income, the provision of income tax and special charges for acquisition related restructuring and transaction costs. Management uses results from operating activities and Adjusted EBITDA to evaluate operating performance as they exclude amortization of software and intangibles (which is an accounting allocation of the cost of software and intangible assets arising on acquisition), any impact of finance and tax related activities, asset depreciation, other income and restructuring costs primarily related to acquisitions.
Adjusted EBITDA:
The table below reconciles Adjusted EBITDA to net income:
Contacts:
Enghouse Systems Limited
Stephen Sadler
Chief Executive Officer
(905) 946-3236
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